Why Use a Third Party Servicing Company


Hi there, Brock VandenBerg with TaliMar Financial, your California trust deed investment advisor. Today, I’m going to talk to you about a common question that we get, which is why do we use a third party company to service our trust deeds? Now, TaliMar Financial remains the master servicer of all our loans, which means that we remain as the point of contact for the borrower, as well as the point of contact for the trust deed investor on that loan. However, the physical process of collecting payments each month, distributing the statements, collecting pay offs and what not is actually done by a third party servicing company. There’s a lot of companies that do it. We prefer to use FCI Lender Services. They are one of the largest hard money servicing companies, especially here in California.

First Reason

So the number one reason though we use a third-party servicing company, is we reduce the need to ever hold investor capital. When I first established TaliMar Financial in 2008, I had the opportunity to work with some seasoned trust deed investment investors. And I think the number one concern they had was, were we going to hold any of their investment capital? And they preferred that we did not. And so that’s why we chose to just simply outsource and use a third-party servicing company. So typically in a transaction, once we’ve originated and underwritten the loan and approved it, our investors will wire directly to the title company.

They are going to be secured directly on that deed of trust. Each payment that occurs monthly will actually be made to our servicing company who will then process that payment and disburse it to all the investors on that loan. When it comes time to pay off the loan, the pay off will be sent to FCI Lender Services who will again, process that pay off and disburse it to all the investors on the loan. Additionally, they’re going to provide all the monthly and year end statements to our investors.

Second Reason

The second reason why we use a servicing company to collect all the payments and process those payments is that they specialize in doing it. With all the new regulations that are occurring almost weekly now, it’s almost impossible for any trust deed investment broker to stay on top of it.

FCI Lender Services being that they specialize in servicing have the capability to constantly modify the way they service their portfolios or all their loans, to ensure that they’re compliant with all the new regulations that are occurring. And so that is why we prefer to simply use them. They are much more capable of physically following the regulations that are necessary for servicing a loan, especially here in California.

Third Reason

And then the third reason why is the cost associated with servicing loans. First, you have to purchase a very expensive loan servicing software, and then you have to increase your head count to manage that software and then increase office space to collect all those payments, process all those payments, and then Disburse those payments off to the lenders on that loan. So when you start to look at just the sheer cost to service a loan, it’s much cheaper to have that outsourced to a third party. And then those costs savings are transferred back to the lenders, typically in higher yields on the notes that we offer.

So those are the top three reasons why we prefer to use a third-party servicing companies. Super interested to hear what you have to say. You may comment on this video. If you’re interested in learning more about our process of our servicing our loans, feel free to give me a call. If you’re interested in learning more about investing through TaliMar Financial and trustees, absolutely give me a call. All my contact information is here on the screen. We appreciate you listening and I look forward to chatting with you soon.


Call Us